"We revised the outlook to stable as the lengthening slowdown in China and continued capital expenditure by Jaguar Land Rover Automotive Plc (JLR), Tata Motors' key wholly owned subsidiary, will result in negative free operating cash flow for Tata Motors. As a result, Tata Motors' ratio of funds from operations (FFO) to debt will be weaker at about 20%, instead of our previous expectation of above 30%," the rating agency said.

Shares of Tata Motors was trading higher by 1.65 per cent despite the revision. The shares have fallen steeply from levels of Rs 606 to Rs 293 on worries of a slowdown in its main market of China.